High demand and low inventory have created an unlikely housing situation in Canada: booming house prices. This scenario is expected to carry-over into 2021 as lifestyle changes bring some people into cities and encourage others to search for more space. And Canada's most populous city is not immune to these changes, with Toronto house prices reflecting shifting priorities.
Are Toronto House Prices Increasing or Decreasing in 2021?
The answer is increasing, as housing supplies continue to drop and demand rises. This is owed to immigrant homebuyers who are expected to enter Toronto for educational purposes. First-time homebuyers are also likely to move into the city in hopes of finding affordable condominiums, which still reflect a buyer's market thanks to diminished demand. The rest of the market, including single-family homes, continues to favour sellers.
Toronto housing prices are expected to climb by an average of 6% in 2021. Forecasts for condo prices, however, suggest a stall at an increase of less than 1 percent. This upward mobility is expected to spread across Canada, with home prices projected to rise by 5.5% to an average of $746,100. Condominium prices are similarly expected to climb a modest 2.25% to $522,700.
Although Toronto will likely see a spike in home prices, it falls a little short compared to numbers forecasted for other areas. The key is in location; many Canadians are seeking larger, more spacious homes they can also work from. The COVID-19 pandemic has given way to fewer people commuting to offices. As this trend persists, people find they have the flexibility to work from anywhere and thus want to explore their options.
Retiring baby boomers likewise want out of congested cities and to settle into quiet but convenient towns. Those areas expected to witness above-average home prices include:
Moving Out of the City
Suburban neighbourhoods in Vancouver are also expected to be top performers with their access to outdoor space. An August 2020 survey echoes this sentiment, finding that 32% of Canadians want to relocate from urban centres into small towns or the suburbs.
Forecasters also anticipate an 8 percent jump in the average price of recreational properties. Eighty-six perecent of recreational regions now report insufficient home inventories as buyers look to work remotely from farmlands, seaside cottages, and ski chalets.
As little as two years ago, shoppers sought these properties to relax on the weekends. Now, however, attitudes have shifted, and buyers seek recreational homes not as holiday getaways, but as their primary residences. The following illustrates how prices have risen, on average, in the last year:
- Single-family recreational homes are up 11.5%
- Recreational condos are up 9.7%
- Waterfront properties are up 13.5%
Home market activity will likely be driven by a combination of move-over and move-up buyers as prices across Canada, including in Toronto, continue to rise. For more information on buying or selling your home, contact Nancy Pierce at 416-985-1486 or Dave Duncan at 416-894-4079.